$2M Robinhood Trade Execution Class Action Lawsuit Settlement, File By July 13, 2026 For Cash Payment (Average $17.60)
Robinhood agreed to pay $2 million to settle a class action lawsuit alleging it failed to provide “best execution” for customer trades between September 1, 2016, and September 1, 2018. If you placed market orders during this period that executed at prices worse than the National Best Bid or Offer, you can claim an average payment of $17.60—but you must file by July 13, 2026.
The lawsuit accused Robinhood of routing customer trades in ways that generated profits for the company through payment for order flow arrangements while allegedly causing customers to pay more when buying stocks and receive less when selling them.
What the $2M Settlement Covers
What Trade Execution Issues Led to the Lawsuit
The class action alleged Robinhood violated its duty to provide “best execution” for customer trades. Under securities regulations, broker-dealers must execute customer orders at the most favorable terms reasonably available.
Best execution means getting the best possible price when buying or selling securities. When you buy stock, your broker should route your order to get you the lowest available price. When you sell, they should get you the highest price.
The lawsuit claimed Robinhood prioritized its own profits over customer interests by routing orders to market makers who paid Robinhood for the order flow, rather than seeking the best available prices for customers.
Between September 1, 2016, and September 1, 2018, Robinhood allegedly executed customer market orders at prices inferior to the National Best Bid or Offer (NBBO) at the time orders were routed. The NBBO represents the best available buying and selling prices across all exchanges.
Court documents indicate approximately 56,805 individuals are settlement class members.
Who Is Eligible to File a Claim
You qualify for the settlement if you were a United States customer of Robinhood Financial LLC, Robinhood Securities LLC, or Robinhood Markets Inc. who placed one or more qualifying trades between September 1, 2016, and September 1, 2018.
Qualifying trades include market orders (not limit orders or stop orders) to purchase or sell equities that were routed during market hours and executed at prices higher or lower than the NBBO at the time the order was routed, where the aggregate difference between your execution price and the NBBO was greater than $5.
If you bought stock and the execution price was higher than the National Best Offer when your order was routed, your trade qualifies. If you sold stock and the execution price was lower than the National Best Bid when your order was routed, your trade qualifies.
The settlement received preliminary court approval on December 5, 2025, in the U.S. District Court for the Northern District of California (Case No. 4:20-cv-09328-YGR).
What Compensation You Can Receive
Settlement class members will receive cash payments calculated on a pro rata basis. Each claimant receives an equal percentage of their total calculated damages.
Based on settlement estimates, class members will receive an average payment of $17.60. Your actual payment depends on your individual trading losses during the class period and the total number of valid claims filed.
The settlement administrator calculates each claimant’s damages by measuring the aggregate difference between your execution prices and the NBBO at the time your orders were routed. Larger price differences result in higher calculated damages and larger settlement shares.
Similar to Affirm faces multiple class action lawsuits, this settlement provides compensation based on individual harm calculations rather than flat per-person payments.
What You Must Know
The July 13, 2026 Deadline Is Absolute
Your claim form must be submitted online or postmarked by July 13, 2026. Late claims will not be accepted.
The court scheduled the final approval hearing for May 5, 2026. If final approval is granted and no appeals are filed, settlement payments will be distributed after all appeals are resolved.
Understanding Payment for Order Flow
Robinhood popularized commission-free trading by generating revenue through payment for order flow (PFOF). Under this model, market makers pay brokers to route customer orders to them for execution.
Critics argue PFOF creates conflicts of interest because brokers may route orders to market makers offering the highest payments rather than the best execution prices for customers. The Securities and Exchange Commission has increased scrutiny of PFOF practices in recent years.
Robinhood has not admitted any wrongdoing but agreed to settle to avoid the expense and uncertainty of continued litigation—a standard position in securities fraud class action lawsuits.
What the Allegations Mean for Investors
The lawsuit claimed that despite advertising “commission-free” trading, Robinhood customers paid hidden costs through inferior execution prices. When execution quality suffers, customers effectively pay more than necessary when buying and receive less when selling.
For example, if the National Best Offer for a stock was $50.00 when you placed a market order to buy, but your order executed at $50.05, you paid an extra $0.05 per share. Multiply that across thousands of trades and millions of shares, and the costs add up.
The Financial Industry Regulatory Authority (FINRA) requires broker-dealers to regularly review their order routing arrangements and execution quality to ensure they’re meeting best execution obligations.
How This Settlement Compares
The $2 million settlement divided among approximately 56,805 class members results in relatively modest per-person payments averaging $17.60.
For context, recent securities settlements include the Kraft Heinz class action lawsuits ($450 million for investors) and various other trading platform disputes.
Robinhood has faced multiple legal challenges beyond this case, including a separate $65 million FINRA settlement in 2020 over best execution violations and a $70 million settlement with the SEC in 2021.
What to Do Next
How to File Your Claim
Visit the official settlement website at RobinhoodOrderFlowSettlement.com or call the settlement administrator at 833-754-8881.
You can file your claim online (recommended for faster processing) or request a paper claim form by mail. If mailing, send to: Kroll Settlement Administration LLC, P.O. Box 5324, New York, NY 10150-5324.
Email inquiries can be sent to [email protected].
What Documentation You Need
The settlement administrator will verify your eligibility using trading data provided by Robinhood. You typically don’t need to provide your own documentation unless requested.
If you no longer have access to your Robinhood account or trading history, contact the settlement administrator for assistance. They have access to the necessary trading records.
Protect Your Investments Going Forward
Understanding broker obligations helps you make informed decisions about where to trade. All broker-dealers must provide best execution, but execution quality varies.
Review your broker’s order routing disclosures, typically available in quarterly Rule 606 reports. These reports show where your broker routes orders and what payments they receive from market makers.
Consider using limit orders instead of market orders when precise pricing matters. Limit orders specify the maximum price you’ll pay when buying or minimum price you’ll accept when selling, giving you more price control.
When to Consult an Attorney
Most class members can file claims without legal representation. The settlement process is straightforward, and class counsel handles the litigation.
However, consider consulting a securities attorney if you believe you suffered substantial losses exceeding what the settlement will provide, have questions about opting out to pursue individual litigation, or need help understanding your rights as an investor.
Individual lawsuits may recover higher damages but require proving your case and involve significant legal costs and risks.
Frequently Asked Questions
Who qualifies for the Robinhood trade execution settlement?
U.S. customers of Robinhood who placed market orders to buy or sell stocks between September 1, 2016, and September 1, 2018, where the execution price was worse than the National Best Bid or Offer by more than $5 in aggregate across all qualifying trades during the class period.
How much money will I receive?
The average payment is estimated at $17.60 per class member. Your actual payment depends on your individual calculated damages (the aggregate difference between your execution prices and the NBBO) and the total number of valid claims filed. Payments are distributed on a pro rata basis.
What is the claim deadline?
Claims must be submitted online or postmarked by July 13, 2026. This deadline is firm with no extensions.
Do I need proof of my trades?
No. Robinhood provided trading data to the settlement administrator, who will verify your eligibility and calculate your damages. You don’t need to submit your own trading records unless specifically requested.
What if I closed my Robinhood account?
You’re still eligible if you had qualifying trades during the class period, regardless of whether your account is currently active. The settlement administrator has access to historical trading data.
Can I opt out and sue Robinhood individually?
Yes. The deadline to exclude yourself from the settlement is March 30, 2026. If you opt out, you won’t receive settlement benefits but preserve your right to pursue individual litigation. This makes sense only if you have substantial documented losses exceeding the settlement payment.
When will payments be sent?
Payments will be distributed after the court grants final approval on May 5, 2026, and any appeals are resolved. Expect payments approximately 60-90 days after final approval, likely summer or fall 2026.
Last Updated: January 24, 2026
Disclaimer: This article provides general information only and does not constitute legal advice or investment advice.
If you traded stocks on Robinhood between September 2016 and September 2018, file your claim today at RobinhoodOrderFlowSettlement.com before the July 13, 2026 deadline.
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About the Author
Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
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